Av|nava Mukher[ee
8rot|n Gangu|y
Lkta 8awa
Man|sh kumar
Shubhad|p M|tra
Sr|deb Saha
A Þresentat|on on
1yre lndusLry ln lndla
CONTENTS:
Point Rating Method
External Analysis
PEST
PORTERS 5 FORCES
Ìnternal Analysis
SWOT
CORE COMPETENCÌES
Generic Strategies
LOW COST
DÌFFERENTÌATÌON
FOCUS
- CvL8vlLW Cl
l-l- 1?8L l-D18?
|nanc|a| ¥ear 2009Ŵ2010
1urnover of lndlan 1yre lndusLry 8sŦ
23ţ000Crores
1yre ÞroducLlon (1onnage) 13Ŧ30 lakh MŦ1Ŧ
1yre ÞroducLlon Ŷ ll CaLegorles (-osŦ) 971
Lakh 1yre LxporL from lndla (value) ť8sŦ
3000 crores
-umber of Lyre companlesť 36
lndusLry ConcenLraLlon 10 Large Lyre
companles accounL for over 93Ʒ of LoLal
Lyre producLlonŦ
The !ndian tyre industry
W A0PICULTUPE
W IMDUSTPIAL
PEPFOPMAMCE
WTPAMSPOPTATIOM
WPPODUCTIOM OF
VEHICLES
W MoinIy dominofed
by Orgonised
Secfor.
W Unorgonised
secfor hoIds bicycIe
fyresŦ
W .oI Ioc viIIoges
W o. Ioc kms of
mefoIIed roods
W 9.8I kms of
unmefoIIed roods
W4.I Ioc frucks
WI. buses
W. Ioc cors
W PM cosfs of cosf
of prod.
W Pubber ond corbon
prices - high
W higher cosfs of prod.
W Free ex-imp poIicy
LCML-1 LÞL-
8M
l-1L-lLvL
ÞC1L-1lL
ma[or rellef for Lyre manufacLurers was provlded by Lhe governmenL by reduclng
Lhe exclse duLy on Lyres from 14Ʒ Lo 10Ʒ ln ecember 2008ţ and furLher Lo 8Ʒ ln
lebruary 2009Ŧ
G 1Ak USAGL
1he hlgh Lax conLenL on Lyres can be gauged from Lhe facL LhaL Lhe percenLage of LoLal
Lax
Lo Lhe Lax excluded prlce for varlous caLegorles of Lyres ls Ŵ
W 44Ʒ for 1ruck 1yre
W 41Ʒ forÞassenger Car 8adlal 1yre
W 33Ʒ for 1racLor 8ear 1yre
W 76Ʒ for 1ruck 1yre 1ubeŦ
LCCNCMC LNVCNMLN1ť
1 Unreso|ved 1ax |ssuesť
lgh lmporL duLy on naLural rubber buL lmporL duLy on flnlshed Lyres ls as lowŦ
2 ncreas|ng costs of aw Mater|a|sť
1he Lyre lndusLry ls hlghly raw maLerlal lnLenslveŦ ny change ln Lhe prlces of raw
maLerlals affecLs Lhe proflLablllLy of Lyre companlesŦ
3Ŧ mport restr|ct|ons
1he lndlan Lyre lndusLry ls sufferlng lnLense compeLlLlon from low prlced Lyres from
chlna and oLher ouLh LasL slan counLrlesŦ
4Ŧ oad and support |nfrastructure
Whlle poor road condlLlons have a poslLlve lmpacL on replacemenL demandŦ
W Lxp|os|on |n the number of nuc|ear fam|||es
More purchase of cars and blkes resulLs more sales ln LyreŦ
W |gher car dens|ty per fam||y
lncrease ln purchaslng powerŦ
lgher dlsposable lncomeŦ
W Sh|ft|ng away from Sav|ngsţ to LM cu|ture
Lasy paymenL opLlonŦ
Less Lendency Lowards savlngŦ
1 nd|genous deve|opment of rad|a| techno|ogy
1echnologlcal advancemenLŦ
8 Ǝ lnvesLmenLŦ
2Ŧ Market entry by |nternat|ona| p|ayers
lorelgn companles are enLerlng lnLo domesLlc markeLŦ
lncrease ln quallLyŦ
3Ŧ mproved Capac|tyŴut|||zat|on techn|ques
CosL cuLLlng Lechnlque uLlllzedŦ
1ry Lo lncrease producLlon efflclencyŦ
-L?l ť llvL lC8CL
-L?l ť llvL lC8CL
The tyre industry in Ìndia is fairly
concentrated, with the top 5 companies
accounting for more than 80% of the total
production of tyres.
Intensity of RivaIry :
High
HIGH
ARGAÌNÌNG POWER OF
SUPPLÌERS
W Number of Suppliers ÷ Low
W Availability/ acceptability of raw material
substitutes ÷ Low
W Switching costs ÷ High
W Threat of forward integration ÷ High
W Tyre industry not the key customer
Demand for Tyres
48Ŧ7Ʒ
42Ŧ8Ʒ
0Ŧ3Ʒ
8Ŧ2Ʒ
Sa|es Segments(Vo|ume)
8elacemenL MarkeL
CLMƌs
CovernmenL
LxporL
ARGAÌNÌNG POWER OF
UYERS
ARGAÌNÌNG POWER OF
UYERS
W OEM's High
W Ìn Replacement Market Moderate
W Switching Cost Low
W Threats of ackward Ìntegration Low
due to HIGH ENTRY BARRIERS
THREAT PTENTIA
ENTRANTS
THREAT PTENTIA
ENTRANTS
ENTRY ARRÌERS
W Highly capital intensive industry
Rs4bn for radial tyre plant with a capacity of
1.5mn tyres
Rs1.5-2bn for a crossply tyre plant of a
capacity to manufacture 1.5mn tyres
W High raw material costs
W Shortage of raw material
W Force of rivalry
W High risk
ow, -:9ÌNCREASÌNG
W mport of tyres
W S mark made compulsory
THREAT OF SUSTÌTUTES THREAT OF SUSTÌTUTES
S|rcn¸|hs
· Ri¸h| produc|s, quali|v and
rcliabili|v.
· Supcrior produc| pcrlormancc vs.
compc|i|ors.
· Brand Ima¸c
· Produc|s havc rcquircd
accrcdi|a|ions.
· Hi¸h dc¸rcc ol cus|omcr sa|islac|ion.
Vcakncss
· No| vcrv popular in |hc
in|crna|ional markc|
· Dclivcrv-s|all nccd |rainin¸.
· Cus|omcr scrvicc s|all nccd
|rainin¸.
· Proccsscs and svs|cms, c|c
· Mana¸cmcn| covcr insullicicn|.
Oppor|uni|ics
· Proli| mar¸ins will bc ¸ood.
· Could cx|cnd |o ovcrscas.
· Could scck bc||cr supplicr dcals.
· An applicd rcscarch ccn|rc |o crca|c
oppor|uni|ics lor dcvclopin¸
|cchniqucs |o providc addcd-valuc
scrviccs
Thrca|s
· Vulncrablc |o rcac|ivc a||ack bv
ma¦or compc|i|ors.
· Lack ol inlras|ruc|urc in rural arcas
could cons|rain invcs|mcn|.
· Hi¸h volumc/low cos| markc| is
in|cnsclv compc|i|ivc.
S1LNG1S
W lmproved capaclLy uLlllzaLlon and overall cosL efflclency
W 8ellablllLy and urablllLy (Mlleage)
W ÞroducL lnnovaLlon
W CusLomer focus
W Lrong dlsLrlbuLlon neLwork
W lgh lmporLance Lo 8Ǝ and conservaLlon of energy
JLAkNLSSLS
W volaLlllLy ln lndusLrlal relaLlonsŦ Lxť Lhe recenL labour unresL ln Þuducherry
W CosL Þressures from 8aw MaLerlals
W Large lnvesLmenL on seLLlng up planLsŦ
CÞÞC1UN1LS
W LxlsLlng Ǝ poLenLlal growLh of
auLomoblle lndusLry
W CovernmenL's focus on developmenL
of lnfrasLrucLure
W ÞoLenLlal change ln Lhe Lyre paLLerns of
commerclal vehlcles from blas Lo radlal
paLLerns
W 8educLlon ln lnLeresL of loans
1LA1S
volaLlllLy of prlces of rubber Ǝ crude oll
Leep lnflow of lnferlor Chlnese Lyres
Low llquldlLy and hlgh lnLeresL cosLs
lmporLs from Chlna now consLlLuLe
around 3Ʒ of markeL
A core competence is a well-perIormed internal activity central
(not peripheral or incidental) to a company`s competitiveness
and profitability
AS Mehtaţ Market|ng D|rectorţ Ik 1yresŦ
ƍ1echno|ogy and ƎD form the p|||ars of our growth
strategyŦ"
ƍCons|der|ng the rap|d pace of growth of 'rad|a||sat|on' across product
categor|esţ we are |nvest|ng heav||y |n expand|ng our capac|t|esţ both at ex|st|ng
|ocat|ons and at the new green s|te |ocat|on near Chenna|ţ" says AS Mehtaţ
Market|ng D|rectorţ Ik 1yresŦ
'Cur Core Competency |s nvent|on' Ŷ CGS 1yres
At th|s year's L|ma |nternat|ona| agr|cu|tura| mach|nery exh|b|t|on |n 8o|ognaţ
ta|yţ CGS 1yres |s d|sp|ay|ng a number of |ts productsţ such as the Agroforestţ a
product the manufacturer says preserves the benef|ts of forestry and f|e|d tyres
as |t |s 1S per cent more durab|e and punctureŴres|stant than a standard tyreŦ
1) Cvera|| Cost Leadersh|p strategyť
chlevlng lowesL producLlon and dlsLrlbuLlon cosLs so LhaL Lhey can
prlce lower Lhan Lhe compeLlLorŦ
2) D|fferent|at|on strategyť
1he buslness concenLraLes excluslvely on achlevlng a superlor
performance ln an lmporLanL cusLomer beneflL areaŦ
eŦgŦ MŴ1yres w|th Musc|es
3) ocus strategyť
ln a focus sLraLegy Lhe buslness focuses on one or more narrow
markeL segmenLsŦ
eŦgŦ 8r|dgestone nd|aŴ Leaders |n the Þassenger Car 1yre market
MŴ ocus|ng on heavy duty veh|c|es
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by 8roLln Canguly
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by vlnava Mukher[ee
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by LkLa 8awa
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by Manlsh krŦ 8arul
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by ubhadlp MalLra
Ma[or factors po|nts Chenna|Ŵ
8anga|ore
Þune Gurgaon Gu[arat
Lfflclency
lacLor
Labour
producLlvlLy cosL
10
Labour flexlblllLy 10
CaplLal efflclency 10
8esource
vallablllLy
CuallLy
manpower
10
lnfrasLrucLure 10
8aw maLerlal 10
blllLy Lo
aLLracL
lnvesLmenL
Lconomlc pollcles
and sLablllLy
10
lncenLlves 10
ÞroxlmlLy Lo
MarkeL
omesLlc/LxporLs 10
uLo clusLer 10
ÞolnLs glven by rldeb aha